Navigant Research Blog

Homeowners looking to minimize their carbon footprint and reduce their energy costs often buy plug-in electric vehicles (PEVs) in tandem with solar panels. In most instances, any excess solar power produced is sent to the grid at a fixed price per kilowatt-hour or subtracted from the households’s overall power demand via net metering.

However, new residential chargers from electric vehicle (EV) charging equipment manufacturers Etrel and Circontrol have advanced load monitoring features that enable EV charging to automatically be timed with residential solar power production. Both companies exhibited their products at the recent eCarTec conference in Munich, Germany, which featured automotive companies, Tier 1 and Tier 2 suppliers, and EV charging hardware and software companies from across the globe.

Etrel, which hails from Slovenia, continues to impress me with its ability to stay at the forefront of EV charging management technology. When I first met with them nearly 2 years ago, the company had the most sophisticated backend EV software platform. Etrel’s residential Smartcharger is paired with a load monitoring device that senses the power draw from the rest of the home as well as any power being produced by a home solar array. Homeowners can program the Smartcharger to optimize charging for when solar power is being generated, or allow the power to be sold back to the grid if that would have greater economic benefit. The sensor detects the overall household power demand and varies the vehicle charging rate to ensure that the maximum amount of household power draw is never reached.

This feature seems obvious, yet it is only now arriving in residential EV chargers. Etrel’s Rok Kralj said the charger/power monitoring product will be available in 2016. He also said the company has sold several hundred units to date, split between residential and commercial chargers.

Similarly, Circontrol of Barcelona, Spain showcased its eHome residential charger, which also dynamically varies the vehicle charging rate depending on what is going on in the home. The company’s BeOn sensor, due out in January, is coupled with the eHome charger and monitors home energy consumption to make sure that the EV charging rate doesn’t add a load that would surpass the recommended safe level. And as with Etrel’s product, the sensor detects when solar power is being produced and will time EV charging based on customer’s programmed preferences.

Both Circontrol and Etrel include mobile and web applications that let consumers see how much power is being used and generated and also allow them to schedule EV charging. Circontrol offers both commercial alternating current and fast direct current chargers.

Some utilities are similarly experimenting with timing EV charging power output to the level of solar being produced in the area so that customers can similarly boast about driving on 100% renewable power. While this is a premium feature today, power producers can prevent excess wind or solar production from being wasted by aggregating EV charging loads.

Despite operating in a smaller EV market than North America, European EV charging companies including Circontrol and Etrel continue to innovate in the charging market through intelligent hardware and software platforms. It would benefit EV owners if global competitors kept pace with these load balancing features.

Community solar (also known as shared solar) has become a hot topic across the United States over the last couple of years as residences and businesses seek alternatives to conventional energy sources. According to a National Renewable Energy Laboratory (NREL) report released in April, about half of all homes and businesses in the United States cannot host a PV system of adequate size on their property. The community solar market has the potential to increase PV deployment by 5.5 GW-11 GW from 2015 to 2020.

Today, 13 states and the District of Columbia have shared renewables policies in place, and many other states are considering programs. Utilities across the country are embracing community solar, viewing it as an opportunity to retain their customers and compete against the burgeoning self-generation solar PV market by providing a utility 100% solar option. Navigant colleague Richelle Elberg discussed one such project in a blog earlier this month detailing how Tucson Electric Power’s Residential Solar Program is a win-win for solar proponents and utilities.

Navigant Consulting is currently collaborating on the Community Solar Value Project, one of 15 projects chosen for funding in 2015 by the U.S. Department of Energy’s SunShot Initiative under its Solar Market Pathways Program. The project aims to increase the scale, reach, and value of utility-based community solar programs through project design and the integration of demand response and storage.

California’s Role

California is one of the four states paving the way. In late 2013, the California state legislature signed into law Senate Bill (SB) 43, the Green Tariff Shared Renewables (GTSR) Program bill. The GTSR Program is intended to expand access to eligible renewable energy resources to all ratepayers who can’t access the benefits of onsite generation and to also create a mechanism where customers can meet their electricity needs from eligible renewable energy resources. SB 43 set a statewide program cap of 600 MW as well as utility caps. It required California’s investor owned utilities (IOUs) to propose a voluntary shared renewables program to the California Public Utilities Commission.

SB 43 Utility Program Caps

(Source: Navigant Consulting)

Decision 15-01-051, published on January 29, 2015, established the steps for California IOUs to implement the GTSR Program, including outlining the two program components:

Green Tariff (GT): Under a GT, a customer pays the difference between their current generation charge and a charge that reflects the cost of procuring 50%-100% of solar generation for their electric needs.

Enhanced Community Renewables (ECR): Under an ECR, a customer agrees to purchase a share of a local solar project directly from a solar developer in exchange for a credit from their utility for the customer’s avoided generation procurement and for their share of the benefit of the solar development.

The rate design approved by this decision ensures that utility customers not participating in the GTSR Program do not bear any of the costs of the program, an important point of discussion at utilities developing shared solar programs across the country. All Renewable Energy Certificates (RECs) from GTSR projects are transferred to the IOUs for retirement on behalf of participating customers. Many community solar programs currently do not retire the RECs on the customer’s behalf, which may become a point of greater discussion in the future.

Projects are to be located within the IOU service territory and within reasonable proximity to participants of the GTSR Program. GTSR projects should be sized between 500 kW and 20 MW, with smaller projects considered at a later program phase.

Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric are currently in the process of rolling out their programs. Once launched, the programs will be open to new subscribers until January 1, 2019, or until the individual utility capacity caps are met.

Note: This blog is the fourth in a four-part series examining the evolution of U.S. solar companies.

In the final part of my series focused on the future of U.S. solar companies, I will cover yieldcos and community solar.

Yieldcos

The solar market has seen a dramatic increase in the number of yieldcos during the past 2 years. My colleague, Roberto Rodriguez Labastida, recently blogged on the topic, explaining that the idea behind yieldcos involves the creation of a company to buy and retain operational infrastructure projects and pass the majority of cash flows from those assets to investors in the form of dividends. Structurally, yieldcos are similar to real estate investment trusts. They are also almost ideal for renewable energy projects, including wind farms.

In July 2014, SunEdison established a yieldco, called TerraForm Power Inc., which raised approximately $500 million through a successful initial public offering. In March 2014, First Solar and SunPower combined forces to offer a joint yieldco called 8point3, the amount of time, in minutes, it takes for light to travel from the sun to earth. The joint yieldco will include 87% utility-scale power plants and 13% rooftop, with installations in the United States, Chile, and Japan. There are also more than 15 other yieldcos from other large renewable energy providers, including NRG Yield, NextEra Energy Partners, Abengoa Yield, Pattern Energy Group, and Transalta Renewables.

Community Solar

To facilitate the rollout of community solar, U.S. states are expanding policies for virtual net metering, allowing multiple customers to participate in the same metering system and share the output from a single solar facility. Whether or not they are required to be physically connected to the system varies by policy. Here is a selection of historical and current shared solar programs:

Colorado: Through the Community Solar Gardens Act, IOUs were required to accept 6 MW per year from community solar gardens for 2011 through 2013 (2 MW project limit, minimum of 10 participants, restricted to same municipality or county as the garden).

Delaware: Through community net metering, full retail credit is given for participants on the same distribution feeder as the community energy facility (subject to a net energy metering cap, minimum of two participants).

Minnesota: Through the solar Energy Jobs Act, Xcel Energy is required to credit community solar gardens at the retail rate (1 MW size limit, at least five participants, subscriptions for 25 years). The Minnesota Public Utility Commission recently provided further clarification that expanded the system size limit to 5 MW alternating current (AC).

Pure-play community solar companies, such as Clean Energy Collective and SunShare, are now being joined by major players, including SunRun and SolarCity. SolarCity stated that it will partner with Minnesota-based developer Sunrise Energy Ventures to develop up to 100 1 MW (AC) community solar installations. While this market is expected to require time to develop, as each public utility commission sets the rules in each state, the opportunities and pipelines of projects are growing.

Looking back, and ahead, at the trends covered in this four-part blog series, U.S. solar PV companies have done a remarkable job adapting to the changing landscape. Moving beyond the expiration of the 30% Investment Tax Credit (ITC) at the end of 2016 is just another one of those evolutions.

Founded in 1974, Northern Power Systems (NPS) of Barre, Vermont, is returning to its microgrid roots, strengthening its market-leading position as the wind turbine of choice for microgrids with recent partnership arrangements on systems controls and energy storage integration.

NPS designs, manufactures, and sells 60 kW and 100 kW wind turbines globally, a scale that appears to be ideally suited to microgrids, which often integrate other diverse generation sources ranging from traditional diesel generators to solar PV. The company went public in April 2014 on the Toronto Stock Exchange. Since NPS has deployed over 500 of its wind turbines in the field, it is the market leader today in remote microgrids such as those deployed in Alaska.

Though the company launched a PowerRouter microgrid testbed in 2002 and was involved with the pioneering concept of droop frequency that fell under the umbrella of the Consortium for Electric Reliability Technology (CERTS), it steered away from microgrids when its parent corporation Distributed Energy Systems declared bankruptcy in 2008. A newly independent NPS returned to the market that year with fresh investors and a focus on its wind turbine product line. It is now refocusing on microgrids as a business opportunity and offering its next-generation bidirectional FlexPhase power converters for a variety of microgrid and other energy storage applications.

With sophisticated controls provided via its power conversion technology (PCS), which helps relieve stress on the microgrid, NPS’s small wind turbines are ideally suited for remote microgrid applications. In addition, the NPS 60/100’s ability to control reactive power independent of wind speed is also a plus. Among other unique features is a simplified turbine architecture that utilizes a unique combination of a permanent magnet generator and a direct-drive design.

Partnering for Success

Two new partnerships enhance its microgrid offer. The most important was announced this month: a non-exclusive strategic partnership with MCM Energy Labs srl (MSM), a company that is part of the Italian industrial group ELVI. By integrating its FlexPhase converters with MCM’s hybrid power controls, integration and project deployment expertise, Northern Power is shining a spotlight on a fascinating debate within the microgrid community: What is the best approach to optimizing distributed energy resources (DER) within a microgrid?

Larger technology companies tend to shrink down what they do on the macrogrid down to a microgrid, with sophisticated metering and sensors and complex communication IT systems often requiring substantial customized engineering. The approach now being embraced by Northern Power— as well as other smaller market entrants—is an elegant solution that typically relies upon droop frequency, a concept that is a longstanding principle embedded in generation controls of the macrogrid, but which has profound implications for microgrids. In essence, it is a self-regulating, peer-to-peer approach revolving around simple physics: that frequency modulates (ever so slightly) when different DER are integrated into a single system (i.e., a microgrid.) There is no need for resources to talk to each other; they naturally adjust to keep the required 60 Hz (or 50 Hz) necessary for grid stabilization.

Just last month, Northern Power also announced a partnership with FIAMM Energy Storage Solutions, which manufactures a sodium nickel chloride battery. When linked to Northern’s PCS, FIAMM’s batteries are able to provide load shifting and seamless islanding services, as well as voltage and frequency controls for either direct current (DC) or alternating current (AC) microgrid or utility grid applications. With the incorporation of MCM’s microgrid controller and FIAMM’s battery solutions, NPS has positioned itself as offering a lower cost controls platform for microgrids than many of its competitors.